Mcchip Resources (MCS) AI Stock Analysis

• Market Cap: C$11.48M
• Dividend Yield: 2.82%
• Average Volume (3M): 3.23K
• Price to Earnings (P/E): 2.4
• Beta (1Y): 0.66
• Revenue Growth: N/A
• EPS Growth: 46.81%
• Country: CA
• Employees: 4
• Sector: General
• Sector Strength: N/A
• Industry: Oil & Gas Energy
• EPS (TTM): 0.70
• Shares Outstanding: 5,710,096
• 10 Day Avg. Volume: 2,381
• 30 Day Avg. Volume: 3,231
• PEG Ratio: <0.01
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 2.99
• P/FCF Ratio: 18.69
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: C$2.00 ▲(9.89% Upside)

The score is driven primarily by a strong balance sheet and very attractive valuation (low P/E plus dividend). Offsetting these positives are weak/unstable cash flow and inconsistent operating performance (negative EBIT in TTM), while technical indicators point to a largely neutral momentum backdrop.

Positive Factors

Conservative balance sheet (low leverage)

A near-zero debt position and materially higher equity provide durable financial flexibility for capital allocation in an inherently cyclical oil & gas sector. Reduced leverage lowers default risk, supports access to capital for investments, and cushions commodity-driven downturns.

High reported margins

Sustained high gross and reported net margins imply structural cost advantages or favorable contract economics. If core operations can be stabilized, these margin levels can support long-term profitability, investment capacity, and the ability to absorb commodity price volatility.

Growing equity supports financial flexibility

A rising equity base strengthens the firm's capital structure, enabling funding of capex, strategic projects, or opportunistic M&A without overreliance on debt. This durability improves resilience through multi-quarter industry cycles and preserves strategic optionality.

Negative Factors

Weak and inconsistent cash generation

Repeated negative operating and free cash flow indicate the business struggles to convert reported earnings into cash. Over months, persistent weak cash generation threatens the firm's ability to fund operations, invest, pay dividends, or absorb shocks without external financing.

Inconsistent operating profitability (negative EBIT)

Negative and volatile EBIT across periods suggests core operations are not reliably profitable and that reported net income may depend on non-operating items. Long-term value creation depends on restoring consistent operating profits and cash-producing activities.

Volatile and shrinking revenue base

Sharp swings in revenue reduce forecasting accuracy and strain margins, making capital planning and investor visibility difficult. A volatile revenue base increases exposure to market cycles and weakens the predictability of future cash flows and returns.

Mcchip Resources Business Overview & Revenue Model

Company Description

McChip Resources Inc. operates in the natural resource industry in Canada. The company invests in petroleum interests, as well as direct and indirect interests in minerals. It also holds interest in the Saskatchewan Potash project located in the province of Saskatchewan. The company was formerly known as Madsen Red Lake Gold Mines Limited and changed its name to McChip Resources Inc. in May 1981. The company was incorporated in 1935 and is based in Toronto, Canada.

How the Company Makes Money

Mcchip Resources generates revenue primarily through the sale of mined minerals and metals. The company operates under a revenue model that includes direct sales to industrial clients and partnerships with larger mining corporations for joint ventures and resource sharing. Key revenue streams include the extraction of ores, refining processes, and the delivery of finished product contracts. Additionally, MCS may benefit from strategic alliances with technology providers and environmental firms, which can enhance operational efficiency and open new market opportunities, thus contributing to its overall earnings.

Mcchip Resources Financial Statement Overview

Summary

Mixed financial quality: the balance sheet is strong with effectively no debt and growing equity, and reported margins are high. However, EBIT has been negative in TTM and cash generation is weak with negative operating and free cash flow in TTM, raising concerns about earnings quality and durability alongside volatile revenue.

Income Statement

Profitability is strong on the surface, with extremely high gross margins across years and very high net margin in TTM (Trailing-Twelve-Months). However, operating performance is less consistent: EBIT is negative in TTM (Trailing-Twelve-Months) and was negative in several prior years, suggesting earnings are meaningfully influenced by non-operating items. Growth is also volatile—revenue fell sharply in TTM (Trailing-Twelve-Months) after a large step-up from 2023 to 2024—so the revenue base looks less stable than the bottom line implies.

Balance Sheet

The balance sheet looks conservatively positioned. Leverage has improved to effectively no debt in TTM (Trailing-Twelve-Months) versus modest debt levels historically, and equity has grown materially, supporting financial flexibility. Returns on equity are strong in recent periods, although they appear somewhat elevated relative to inconsistent operating profit, which can be a sign that profitability is not purely driven by core operations.

Cash Flow

Cash generation is a key weak spot. Operating and free cash flow are negative in TTM (Trailing-Twelve-Months) and were also negative in 2023, indicating uneven cash conversion despite reported profits. While 2024 showed positive cash flow, the reversal in TTM (Trailing-Twelve-Months) raises questions around working-capital swings and the durability of earnings quality.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.31M	1.30M	480.49K	560.20K	695.28K	528.60K
Gross Profit	1.28M	1.28M	452.90K	546.18K	679.79K	527.31K
EBITDA	3.42M	452.27K	-335.45K	-150.47K	-161.29K	-96.19K
Net Income	4.87M	2.94M	563.13K	-374.54K	1.23M	1.79M
Balance Sheet
Total Assets	15.41M	12.83M	10.34M	9.80M	9.65M	8.19M
Cash, Cash Equivalents and Short-Term Investments	11.70M	10.83M	8.84M	8.28M	7.78M	6.42M
Total Debt	0.00	1.80M	1.82M	1.56M	830.00K	632.01K
Total Liabilities	621.88K	2.15M	2.10M	1.78M	1.02M	831.53K
Stockholders Equity	14.79M	10.68M	8.25M	8.03M	8.63M	7.36M
Cash Flow
Free Cash Flow	-35.33K	208.80K	-149.10K	140.96K	121.56K	34.00K
Operating Cash Flow	-35.34K	208.80K	-149.10K	140.96K	163.23K	55.26K
Investing Cash Flow	5.93M	291.38K	-208.62K	-169.54K	-86.53K	593.77K
Financing Cash Flow	-2.36M	-537.14K	-85.53K	420.20K	-5.91K	-614.34K

Mcchip Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MCS, the sentiment is Positive. The current price of 1.82 is below the 20-day moving average (MA) of 1.87, above the 50-day MA of 1.78, and above the 200-day MA of 1.47, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 61.60 is Neutral, neither overbought nor oversold. The STOCH value of 54.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MCS.

Mcchip Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCS	66 Neutral	C$11.48M	2.36	11.04%	2.82%	―	46.81%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
GIGA	48 Neutral	C$15.11M	-5.90	-11.32%	―	―	-17.47%